It seems like we just start to understand one generation’s financial and investing habits and another one comes along with the potential to rewrite the wealth management playbook.
It wasn’t that long ago that Millennials were the sole focus of insights into next generation investors, but Gen Z is frequently seen as where the new wave of clients may come from, as long as they choose human advisors over DIY trading apps.
But while research that has already imagined what Generation Beta (those born since 2025) might feel about money may feel a little too futuristic, there is another cohort that is growing up fast. Generation Alpha were born between 2010 and 2025 and while the youngest are still in diapers, those at the other end of the scale already have a drivers licence.
Last year, Mintel released a report stating that “Gen Alpha is entering the financial landscape earlier than any generation before, already armed with spending money, digital fluency and growing financial curiosity – giving US financial institutions a golden opportunity to reach an addressable group at the beginning of their financial journey.”
Recently, Megan Rust, Franklin Templeton's vice president of ETF capital markets, told InvestmentNews that younger investors are likely to fuel the growth in active ETFs; an indication that product choice will be a key part of the next-gen investor story.
Mindful of these young teens hurtling towards adulthood, Schwab has announced a new trading account for those as young as 7th grade and for yet another generation that is exposed to finfluencers and others telling them how they can have it all, this could be the most money-focused generation of highschoolers yet.
The Schwab Teen Investor account is a joint brokerage setup for those aged 13 to 17 that requires participation from a parent or legal guardian. The structure is designed to give teens practical investing experience while ensuring adult oversight remains in place.
It’s not the first firm to do so; Fidelity Investments were quicker off the mark with their teen brokerage account in 2021 and there are several custodial accounts in the market, along with family focused DIY apps from fintechs including Greenlight and Copper.
“Young people – including teens – want to invest earlier than ever before, and the Schwab Teen Investor account offers an accessible and engaging way to help teens start their investing journey,” said Jonathan Craig, head of retail investing at Schwab.
The launch comes amid growing enthusiasm for investing among younger demographics. Company data indicates that 70% of teens show a strong interest in investing, while 73% of parents say financial education is a priority for their children. The research also shows that teens want their parents to help them with investing.
Teen users can invest in equities, fractional shares, ETFs, mutual funds and fixed income products through Schwab’s platform. However, more complex and higher-risk strategies — including margin, options and futures — are not permitted.
Education is also a key component and those teens that complete an online investing course within 45 days will get a $50 rewards in fractional shares in S&P500 companies.
Schwab is likely to face increased competition for Gen Alpha, especially as they reach college age, but with Gen Z making an impact on how wealth advisory services are delivered right now, the evolution is set to endure as new generations determine their financial mindsets.
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